The Attorney Generals Office has ruled (PDF) a ballot question repealing the Casino Gaming Legislation is “not certified” as an uncompensated taking of property. Per the AG’s office:

After a thorough review of the 33 initiative petitions submitted in August, all but five have met the requirements outlined in the constitution to move forward in the certification process, Attorney General Martha Coakley announced today. The AG’s Office certified 28 petitions, which includes 25 proposed laws and three proposed constitutional amendments. The 28 certified petitions cover 14 topics; some petitioners submitted more than one version of a petition on the same topic….

Among the issues barred from being proposed by initiative petition are laws relating to the powers of courts or to religion, laws that make specific appropriations from the Treasury and laws that apply only to limited parts of the state. Article 48 also provides that laws that are inconsistent with certain constitutional rights, such as freedom of speech, freedom of elections, freedom of the press and the right to compensation for a governmental taking of private property, cannot be proposed by ballot initiatives

Statement by repeal casinos/slots law coalition says that after weeks of discussion with top AG staffers, counsel and legal scholars the Repeal The Casino Deal ballot petition was submitted to AG’s office for certification.

AG’s ruling came “out of the blue” according to an email generated by Repeal the Casino Deal chairman John F. Ribeiro a volunteers and resident of Winthrop.

The AG whose statutory responsibility is consumer protection denied (single-handedly through the power of her office) the people’s right to the ballot to exercise their constitutional power.

On a sliver of rubber logic that the application fee for a casino, which is from the law, “a revocable privilege” becomes a “contract” the AG rationalized, “unconstitutional takings” and political ambition.

If the AG certified the casino repeal petition she would have to defend it against attacks by the very industry that has so generously filled campaign coffers over the past eight years. Not something someone who is planning a run for the corner office wants to do.

The risk for a sitting AG to politically rule on a a ballot initiative is low if you think that the people are weak and under-resourced. That media will not question. That push-back can be smothered.

It could also back-fire and destroy a career if for instance, your underlings cherish the rule of law more than their mundane job.

Or, when under-resourced people get really, really angry…..they rise up and begin to use the power of their station granted to them in the very same constitution.

When hubris crosses into corruption it does not go unnoticed or unchecked.

Besides the fact that it is clearly a politically motivated decision to block a ballot question without even the chance to collect signatures, are there any lawyers out there who could comment on the specific argument she used?

I hope this goes to appeal, so the fate of an important ballot question isn’t just the decision of one candidate looking to her gubernatorial aspirations.

1) The Constitution does not permit ballot initiatives that “take” – in the legal sense – a person’s property without compensation.

2) When the bidders gave $400,000 a piece to the Commonwealth as part of the bidding process, this created an “implied contract” that the gaming Commission would at least give their application due consideration.

3) Contract rights (here, the right to fair consideration of their application) are “property” in the legal sense.

4) The ballot initiative would “take” from the bidders their “property” by making it impossible for them to be duly considered for a casino license.

5) Under the initiative, there is no compensation offered for this taking and, under state law, there is little to no chance that the bidders would be adequately compensated for this taking.

6) So, the ballot initiate violates the state Constitution.

It’s worth noting, I think, that the AG makes it clear that the Legislature itself *could* pass the very same law as written in the initiative. The bidders could then probably get their money back in court (if the Legislature passed the law but not if it was a ballot initiative). Also, the Legislature, could pass a law that included the payment of appropriate refunds to the bidders. But, you couldn’t propose such a law by ballot initiative because initiatives also aren’t allowed to appropriate money.

I see no irreparable taking here. The constitutional provision against taking of “property” without just compensation has virtually never, in my understanding, been applied outside the context of real property. And the fees paid for gaming licences were not “appropriated” by the state; they were paid voluntarily. If the law is changed, they can be refunded. Nobody has a legally protected property right all the profits they think they might realize when they plunk down $400K for a license.

The AGO’s letter cites two cases for its argument to the contrary. The first (Dimino in 1998) concerned simply eliminating the tolls put up as security state bonds, an entirely different thing from what’s going on here. In any event, the parties stipulated the “property” issue and it wasn’t really litigated.

The second (Boston Elevated Railway from 1942 – the sheer age of the case suggests the proposition is weak) concerned a law proposing to revoke the company’s rights to an elevated railroad without compensation. But the law granting the rights, back in the 1890s, had provided that they would not be revoked except by eminent domain or by reaching an agreement to pay for them. Neither condition was met and the 1942 case, citing a bunch of Lochner-era cases for the proposition that the promise not to revoke without compensation was “property,” concluded that the “property” rights of the railroad had been violated. The court stated at length that, without the promise not to revoke in the creating statute, the case would go the other way. So I want to know what, in the gambling statute, makes a similar promise?

Really, I think this is a complex legal matter that is certainly open to varying interpretations. The fact that you actually went back and looked at the cited cases is admirable.

BUT, I think you’re making two faulty assumptions here that undermine your argument:

If the law is changed, they can be refunded.

This, the AG argues, isn’t true. First, in Footnote 9, the AG reminds us that it is settled law that a ballot initiative cannot “appropriate” money. So, no legal ballot initiative could include provisions to refund the licensing fees. Then, on page 7 of her letter, the AG cites a bunch of precedent for her related argument that “the proposed law would not leave open a damages remedy against the Commission.”

Nobody has a legally protected property right all the profits they think they might realize when they plunk down $400K for a license

While this is probably true, it’s not really a relevant point. The argument here is that the “property” that was taken is not the potential profits, as you suggest. Rather, the AG argues, the “property” at issue is the implied contractual right to have an application duly considered by the Commission. A property right that the bidders have bought with their $400,000+ licensing fees. These fees cannot be refunded without legislation to that effect so their property would be taken without just compensation under the initiative.

the precedent for the argument that “the proposed law would not leave open a damages remedy against the Commission” particularly compelling. I especially don’t find the “unjust enrichment” arguments persuasive. The argument is that there was no “unjust enrichment” because the Commission spent the money for purposes for which it was paid. You can’t simultaneously argue that (1) the gaming companies got what they paid for and (2) they didn’t (which is what the contract/property argument really is). The better argument, I think, is that there’s an implied contractual right to a determination. If they don’t get one, the commission has no valid defense against the equitable claim of unjust enrichment.

I also find the treatment of Carney II unconvincing. The case is much closer to current facts than any other cited, and the AGO just says it doesn’t apply. The case is distinguished by the fact that a prior initiative almost passed. Yes, because it actually reached the ballot.

I’m still scratching my head as to how the SJC can say, plain as day, that gaming companies have no property right in their actual license, but the AGO can say they have a property right in their expectation that the Commission will decide whether to issue them a license or not. It suggests that, once the licensees are chosen and the licenses granted, the AGO’s entire rationale for chucking this initiative disappears.

Slippery, rubbery and it really reeks.
The license fee is for the revocable privilege of a license. Not a contract. The AGO is humping for a predatory business/industry not the Consumers and Citizens of the Commonwealth. Left, Right, Middle….this is wrong.

By this definition, almost any ballot initiative could be struck down. What possible legal framework would not allow this, but would allow dog racing, who’s operators actually had licenses in hand, to be made illegal?

She did not certify what can basically be described as an anti-Citizens United amendment as it takes away free speech rights which is prohibited by the state Constitution. IMO, the people should be considered sovereign to amend the Constitution if they so wish, subject of course to federal supremacy, but the AG does not appear to make that argument.

She did, however, certify a proposed amendment allowing the people to delegate certain powers to a globally elected body, though it seems pretty obvious that the United States and not an individual state is responsible for how we relate to other nations.